China and the World of Business • China Business and the World

One of the book projects for which I have been gathering string for years is a book on disinformation, so I have been following the issue of corporate disinformation and deception in China with great interest.

One of the core questions I have to deal with (both intellectually and as a professional) is whether corporate disinformation is ethical or permissible at any time. Despite Japanese maxims that business is the moral equivalent of war, there are some things that might be acceptable on the battlefield that are less tolerable in the marketplace. In a day of the internet and corporate transparency, I have yet to frame an ethical case for a company to deliberately misinform its publics.

[Agenda Beijing:] Would you recommend companies to employ offensive tactics as well?

[Bruce Wimmer:] Yes. Companies need to be able to detect and neutralize the attacks. In boxing or martial arts that would mean not just deflecting the attack but countering with attacks that might neutralize the threat. This could involve passing disinformation, legal actions and working with various government and law enforcement agencies.

I can see Wimmer’s point, and he is not alone in believing that there might be circumstances where passing deliberately incorrect information is acceptable. He wants to use it as a way to catch a thief, and I think it would be an excellent method to throw off competitors.

But I am not sure if Wimmer has run into the problem I have discovered, which is that once information is passed, it cannot be contained. Even if you were surgical in delivery, ensuring that your intended audiences and nobody else received the initial transmission of that information, that audience would almost certainly pass the information onward. If the disinfo was credible enough to be believed by hackers or your competition, everyone would believe it. The competitor or hacker could pass it onto a credible third party source, who himself could say he got it from a credible source, then everyone would believe it was true. Some examples, neutered to protect the parties in question:

Using a proxy, one Chinese dairy allegedly passed on disinformation that the products of a competitor dairy were causing toddlers to grow breasts. The target audience, consumers, reacted perfectly, and the competitor’s sales took a hit. Unfortunately, that information also found its way to authorities, whom upon investigating discovered that the disinformation was false, and the credibility and business of the originating company took a hit;

A market leader in a high-tech gets wind that a competitor is planning on introducing a product using an innovative technology. The market leader passes word to that competitor that, in fact, the market leader already has such a product, and is about to launch it. The competitor stops development, but then announces it is doing so because it understands the market leader is planning such a move. The originating company is then left in a quandary: deny the move, and look like a market follower (the impression it had sought to avoid), or confirm it is pursuing the product despite its earlier decision to ignore the technology. (I can count at least three instances of this occurring, and one company that crashed and burned as a result);

Motivated by worrying scientific data, Congress is considering legislation that would affect the future of an industry. The industry pays for the development of studies that impugn the original data and the scientists who gathered it, then pass that information to Congressional staffs. The disinformation leaks and is publicly discredited, effectively discrediting the industry and any legitimate case it seeks to make against the legislation.

The lesson is simple and should not be forgotten: disinformation cannot be confined to a single target audience. Every time a company sets out to deceive (however pure the motive), that information will get out. No company or industry can withstand the hit to its credibility and public trust that such a campaign engenders. We are nearing the day when a nation cannot, either.

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3 Comments

David – there is one other party that gets burned in all of this. Those proxies that you mentioned.
Apple setup a probe with a fake product called “Asterix” a few years back. And followed the disinformation flow and ended up crushing an independent news website (Think Secret) as a result of the move.

How are these proxies to know if the information is credible or not? And if a company acts against these proxies who acted in good faith as in the think secret case – they risk the bad PR to be seen as bullying and stomping down on said proxies. Who in a sense were entrapped.

David – there is one other party that gets burned in all of this. Those proxies that you mentioned. Apple setup a probe with a fake product called \”Asterix\” a few years back. And followed the disinformation flow and ended up crushing an independent news website (Think Secret) as a result of the move.
How are these proxies to know if the information is credible or not? And if a company acts against these proxies who acted in good faith as in the think secret case – they risk the bad PR to be seen as bullying and stomping down on said proxies. Who in a sense were entrapped.
It\’s all like a John Le Carre novel!

I think some of the English language China blogosphere is also hell bent on creating disinformation as well, about specific individuals as well as China per se. There is some nasty writing out there. Its free because they want to spread rumors and lies for their own notoriety or profit.